[New search]
[Printable RTF version]
[Help]
SIMON ANTHONY FUSSELL RUDOLPH ASSIZ DE MENDONCA, R v. [1997] EWCA Crim 1764 (9th July, 1997)
IN
THE COURT OF APPEAL
No
96/4236/X4, 96/4238/X4
CRIMINAL
DIVISION
Royal
Courts of Justice
Strand
London
WC2A 2LL
Wednesday
9th July 1997
B
e f o r e:
LORD
JUSTICE OTTON
MR
JUSTICE BLOFELD
and
HIS
HONOUR JUDGE BEAUMONT QC
(Acting
as a Judge of the CACD)
-
- - - - - - -
R
E G I N A
-
v -
SIMON
ANTHONY FUSSELL
RUDOLPH
ASSIZ DE MENDONCA
-
- - - - - - -
(Handed-down
judgment of Smith Bernal Reporting Limited
180
Fleet Street, London EC4A 2HD
Tel:
0171 831 3183
Official
Shorthand Writers to the Court)
-
- - - - - - -
MR
A SUCKLING QC
&
MR
H GRUNWALD
appeared on behalf of the Appellant Fussell
MR
W RODDICK QC
&
MR
A MARSHALL
(Miss Gomes 9/7/97 only) appeared on behalf of the Appellant Mendonca
MR
D FARRAR QC
&
MR
NJ COLEMAN
(Miss S Clarke 9/7/97 only) appeared on behalf of the Crown
-
- - - - - - -
J
U D G M E N T
(As
approved by the Court)
-
- - - - - - -
Crown
Copyright
Wednesday
9th July 1997
LORD
JUSTICE OTTON: In the Crown Court at Southwark (before HHJ Hardy) the
appellant Simon Fussell (SF) was convicted of conspiracy to defraud and Rudolph
de Mendonca (M) was similarly convicted together with two counts of forgery.
Each
now appeals against conviction by leave of the single judge who also referred
Fussell's application for leave to appeal against sentence to the full court.
Background
The
Crown's case was that between August 1988 and April 1989 SF and M conspired to
make a hidden profit from the disposal of Exide House, Shaftesbury Avenue,
London W1. SF was director and a substantial shareholder of Priest Marian
Holdings (PMH) a public limited company quoted on the stock exchange. PMH was
a property company and one of its assets was the freehold in Exide house. SF
was also a director and substantial shareholder (and at the material time,
Chairman) of Minty Plc (Minty) which was also quoted on the stock exchange.
Architectural Trading Company Limited (ATC) was a private company owned by SF
(65%) and his wife which in turn had a wholly owned subsidiary Anchorbest
Limited (Anchorbest) a property company which later became a subsidiary of
Minty. The ground floor of Exide House was leased by PMH to ATC. The top
three floors were leased to the London Borough of Camden (LBC). LBC used them
to house homeless families.
M
was a chartered accountant and stockbroker with CGS Securities, later re-named
Whitefriars (CGS).
In
the early part of 1998 PMH wished to sell Exide House. On 25 May 1988,
Anchorbest (which by now was a subsidiary of Minty) entered into an agreement
with PMH to buy Exide House subject to the leases to ATC and LBC for £1.8
million, the value put on the property by PMH's valuer. As SF was a director
of both PMH and Minty under stock exchange rules the sale had to be approved by
the shareholders of both companies. On 15 June 1988 the shareholders of PMH
approved the sale. However the valuation was not agreed by the valuers acting
for Minty, mainly because of the uncertain position regarding the lease to LBC
which it was feared might become protected on its renewal date. Consequently
Minty was not willing to perform the contract and proceed with the purchase.
SF
then set out to find an alternative purchaser. Mrs "Katie Chalus" (KC) was
found, or rather invented. This woman was said to be of Iranian origin and
turned out to be a fiction. The evidence pointed conclusively that F had
created her for the purpose of the ensuing transactions. M forged two Powers
of Attorney in his favour empowering him to purchase and mortgage Exide House
which purported to have been executed by her dated 10 and 22 August 1988. M
signed them as a witness. He arranged for an account to be opened for her at
CGS.
It
was the Crown case that KC had been created to enable SF to buy Exide House for
himself and conceal his purchase from the Board of PMH. The sale was duly
completed at a price of £1.85 million subject to vacant possession of the
3 floors let to LBC being obtained by 15 October 1991. Within 7 days of the
exchange of contracts PMH obtained vacant possession of the top 3 floors. 2
days later M instructed solicitors acting for KC to prepare draft contracts for
the sale of the lease of these floors to a Panamanian company. On 26 August
completion took place of the sale from PMH to KC. Five days later £37,573
from the funds advanced by a Swiss bank to KC which were surplus to the sale
requirement were paid into F's wife's account at CGS.
On
14 October 1988 KC entered into an agreement to grant a lease of the top floors
for a term of 150 years to the Panamanian Company Pacific Realty SA (PR) at a
premium of £650,000 the effect of which was to diminish the value of the
freehold. On completion in November approximately £400,000 went to the
Swiss bank to reduce the capital outstanding on the mortgage account and
£185,000 went to F's wife's account at CGS. Payments of rent by ATC were
used to discharge interest due on the mortgage account.
On
24 February 1989 SF reported to the Board of Minty that an opportunity had
arisen to purchase Exide House without vacant possession of the upper floors
for £1.9 million. On 24 April KC sold Exide House to Buckingham Place Ltd
(BPL) for £1.8 million and BPL sold back to back to ATC for £1.9
million. The money received by KC was used to redeem the mortgage. Funds
surplus to this requirement were paid into Pecos Account an offshore company at
CGS. Monies were dispersed through a family trust which F had set up.
Subsequently,
the DTI brought proceedings against SF seeking an order for his
disqualification from acting as a director. In reply SF swore 2 affidavits
dated 16 August 1994 and 16 January 1995 in which he admitted that KC did not
exist. These were handed to the police on 14 March 1995. When interviewed
both defendants denied the offences.
The
Trial
Proceedings
were commenced and the case was transferred to the Crown Court under the
Serious Fraud Provisions of the CJA 1987. At a Preparatory Hearing on 15 March
1996 the Crown applied for, and was granted leave to amend Count 1 of the
indictment to read:
"Count
1
STATEMENT
OF OFFENCE
CONSPIRACY
TO DEFRAUD
PARTICULARS
OF OFFENCE
Simon
Anthony FUSSELL and Rudolph Assiz Joaquin de MENDONCA between the 1st day of
January 1988 and the 31st day of December 1989 conspired together to defraud
Priest Marians Holdings Plc and Minty Plc
(i) by
falsely and dishonestly representing to them :-
(a) that
the sale of a Exide House, Shaftesbury Avenue, London, from PMH to Mrs Katie
Chalus was a bona fide sale to an independent purchaser;
(b) that
Katie Chalus existed and was the genuine purchaser of Exide House;
(ii) by
dishonestly concealing :-
(a) (from
PMH of which Simon Fussell was at all material times the Chairman) the
intention that Katie Chalus should profit from granting a leave to Pacific
Realty;
(b) (from
PMH) the intention that such profit should accrue to those charged;
(c) (from
PMH and Minty, of which Simon Fussell was at all material times the Chairman)
that, between the sale of Exide House by PMH and its purchase by Minty, profits
had been made by those charged through the purchase of Katie Chalus;
(d) by
dishonestly making secret profits from the purchase by Katie Chalus, the leave
to Pacific Realty (in the form of premium and rents) and the sale of Minty,
Simon Fussell being at all times Chairman of PMH and Minty."
The
precise wording of the indictment is critical to this appeal.
The
trial began on 22 April 1996 and the jury retired on 21 May. The jury
convicted SF on Count 1 and acquitted of Count 2 and 3. M was convicted on all
3 counts.
Neither
defendant gave evidence at trial.
On
behalf of F it was said that neither PMH nor Minty had lost in reality and that
there was no evidence that he was involved in the sale to KC or in the large
sums passed through the Pecos accounts. M was operating other people's
accounts at CGS without their knowledge and was involved in other property
transactions which did not involve F. KC was not concealed from Minty in the
documentation and there was nothing unusual from sub-sales from one company to
another on the same day or in the use of a nominee.
For
M it was said that he was a successful business man, the sale of the leave of
Exide House did not produce a profit but simply diminished the freehold which
could be recovered in a rising market. There could not have been an agreement
to defraud Minty because neither appellant could have known at the start Minty
would be a buyer in 1989. Monies in the Pecos account could have come
independently from the sale of Exide House. M believed KC existed. If she was
a fiction, she was created by F. In his affidavit M stated that he believed he
had met a lady who he thought was C at Heathrow Airport.
The
jury convicted SF on count 1 and acquitted on counts 2 and 3. M was convicted
on all three counts.
Grounds
of Appeal
Ground
One
Both
appellants assert that the learned Judge misdirected the jury on the offence of
conspiracy to defraud when he told them that, although the Particulars of
Offence alleged a conspiracy to defraud PMH
and
Minty they could convict if they were sure that only
one
company had been defrauded. It is said that the case was opened to the jury on
the basis that both companies had been defrauded, the trial proceeded on that
basis and that Crown counsel in his closing speech made the same statement.
However, in the course of his closing speech to the jury, leading counsel for F
addressed the jury on the basis that the agreement alleged was to defraud PMH
and Minty in the terms set out in the Particulars and they could only convict
if satisfied that both companies had been defrauded. The judge interrupted the
speech and in the absence of the jury raised the question of the Crown having
to prove that both companies were defrauded. He then ruled that if the jury
was satisfied that any one company was defrauded this was sufficient for then
to convict. The direction which is criticised is at 10F-11D :
"One
final matter before leaving my directions to you on this count. The allegation
by the Crown is that Mr Fussell and Mr Mendonca conspired together to defraud
both PMH and Minty, and Mr Glass for Mr Mendonca told you on Friday that that
meant the Crown had to prove both companies were defrauded, or there was an
intention to defraud both companies before you could convict. That is not so,
in my view, and I direct you that if you are not sure that both companies were
defrauded, but are sure that one was, so long as you all agree as to which one,
that would be sufficient for a conviction.
Let
me give you a similar example. Suppose there is a charge of conspiracy to rob
bank A and bank B in the same High Street. Suppose you were quite satisfied
there was ample evidence in regard to bank A but, for some reason, not sure
about bank B. It would not be sensible or just in those circumstances for you
to have to be directed to acquit the defendants in regard to bank A, and I do
not do so here in these particular circumstances."
In
effect, counsel argue that the judge ruled that for "PMH and Minty" the jury
could read into the indictment "PMH and/or Minty". This, it is submitted means
that the defendants were at risk of being convicted of three different
conspiracies; (a) to defraud PMH and Minty (as originally alleged) or (b) to
defraud PMH or (c) to defraud Minty.
In
support of the argument Mr Alan Suckling QC on behalf of Fussell cited
R
v Greenfield
[1973] 57 CAR 849 where the defendants were convicted of conspiracy to cause
explosions. The prosecution sought to prove the existence of the conspiracy by
calling evidence about 25 explosions or attempted explosions which had occurred
in different parts of England during the period specified. The Court of Appeal
held that a count for conspiracy is bad for duplicity if it charges more than
one conspiracy. Duplicity in a count is a matter of form; it is not a matter
relating to the evidence called in support of the count. In so holding the
Court confirmed the line of authority from
R
v West and others
,
R
v Dave and others
,
and
R
v Griffiths and others
.
In
order to evaluate this submission it is necessary to consider the particular
nature of a Conspiracy to Defraud. The Criminal Law Act 1997 reformed the law
regarding criminal conspiracy and by s.5(1) abolished the offence of conspiracy
at common law. S.5(2) made an exception for the offence of conspiracy to
defraud which was not to become a statutory "offence of conspiracy" under s.1
of that Act. In
R
v Ayres
[1984] 1 AER 619 HL, it was held that this remaining common law offence of
conspiracy to defraud was limited to fraudulent agreements which, if carried
into effect, would not necessarily result in the commission of a substantive
criminal offence by any of the conspirators.
The
Fraud Trials Committee, chaired by Lord Roskill, reported in 1986. At para
3.11 they commented on the problems faced in this field as follows:
"In
any fraud cases a charge of a substantive offence or of a statutory conspiracy
to commit a substantive offence will be entirely appropriate and the maximum
penalties adequate. In some cases, however, the only substantive offence
available may be a relatively minor offence carrying a low penalty or a series
of minor offences, or an offence or offences which are perhaps only incidental
to the fraud. In these circumstances, the prosecution may find it impossible
to prosecute for offences which reflect the totality and gravity of the
allegedly fraudulent conduct in what would otherwise be called conspiracy to
defraud."
The
report went on to consider whether the 1977 Act should be amended so as to
enable charges of conspiracy to defraud to be brought in wider circumstances
notwithstanding that a charge of statutory conspiracy to commit an offence
would also lie or whether a new offence should be introduced.
The
Criminal Law Revision Committee also considered these problems, in particular
the decision in
R
v Ayres
and made recommendations to which the Government responded. In introducing
Criminal Justice Bill 1987 in the Standing Committee debate the Minister of
State at the Home Office referred to
Ayres
and stated that the decision had:
"...
two very damaging effects. First in some major fraud cases, the prosecution
has had to rely upon relatively minor changes which carry correspondingly low
penalties; and, secondly, juries have had to face needlessly complicated
trials, either because numerous small charges were brought in a case, or
because part of the way through a trial on a charge of conspiracy to defraud,
facts emerge which obliged the charge to be dropped and replaced by others.
Because there is no substantive offence of conspiracy to defraud, with the
sustained, serious, collective dishonesty which that involves, substantial
injustices arise."
Subsequently
S.12 of the Act provided :
(1)
If-
(a) a
person agrees with any other person or persons that a course of conduct shall
be pursued; and
(b) that
course of conduct will necessarily amount to or involve the commission of any
offence or offences by one or more of the parties to the agreement if the
agreement is carried out in accordance with their intentions, the fact that it
will do so will not preclude a charge of conspiracy to defraud being brought
against any of them in respect of the agreement."
This
section, therefore, enables conspiracy to defraud to be charged in
circumstances where the course of conduct agreed will necessarily amount to or
involve the commission of any substantive offence or offences by one or more of
the parties to the agreement if carried out. The section confirms the decision
of the House of Lords in R v Cooke 1986 AC 909.
At
common law the leading case on conspiracy to defraud is
Scott
v Metropolitan Police Commissioner
[1975] AC 819 where the following definition was given:
"An
agreement by two or more by dishonesty to deprive a person or of something
which is his or to which he is or would be or might be entitled, or ... an
agreement by two or more by dishonesty to injure some proprietary right (of the
victim)." (per Viscount Dilborne at 1039)
No
deception is required for this kind of conspiracy to defraud. There is also a
separate
type of conspiracy to defraud which does require proof of deception. It
consists of dishonestly deceiving a person into acting contrary to his public
duty. In
Welham
v DPP
[1961] AC 103 Lord Radcliffe at p.123 said:
"Now,
I think that there are one or two things that can be said with confidence about
the meaning of this word "defraud". It requires a person as its object: that
is, defrauding involves doing something to someone. Although in the nature of
things it is almost invariably associated with the obtaining of an advantage
for the person who commits the fraud, it is the effect upon the person who is
the object of the fraud that ultimately determines its meaning. This is none
the less true because since the middle of the last century the law has not
required an indictment to specify the person intended to be defrauded or to
prove intent to defraud a particular person.
Secondly,
popular speech does not give, and I do not think ever has given, any sure guide
as to the limits of what is meant by "to defraud". It may mean to cheat
someone. It may mean to practise a fraud upon someone. It may mean to deprive
someone by deceit of something which is regarded as belonging to him, or though
not belonging to him, as due to him or his right.
...
There is nothing in any of this that suggests that to defraud is in ordinary
speech confined to the idea of depriving a man by deceit of some economic
advantage or inflicting upon him some economic loss.
Has
the law ever so confined it? In my opinion there is no warrant for saying that
it has. What it has looked for in considering the effect of cheating upon
another person and so in defining the criminal intent is the prejudice of that
person: what Blackstone (Commentaries, 18th ed., vol. 4 at p. 247) called to
the prejudice of another man's right"
And
Lord Denning said at p.131:
"If
anyone may be prejudiced in any way by the fraud, that is enough. ----
and
These
scholars seem to think they have found the solution. "To defraud", they say,
involves the idea of economic loss. I cannot agree with them on this. If a
drug addict forges a doctor's prescription so as to enable him to get drugs
from a chemist, he has, I should have thought, an intent to defraud, even
though he intends to pay the chemist the full price and no-one is a penny the
worse off."
It
was originally considered by such scholars that this type of fraud consists in
dishonestly deceiving a person into acting contrary to his public duty as was
the case in
Welham.
In
DPP
v Withers
[1975] AC 842 some of their Lordships expressed the view, obiter, that this was
so. However, in
Wai
Yu-tsang v R
[1991] the Privy Council expressed the view that the cases concerned with
public duties are not to be regarded as a special category but as examples of
the general principle that conspiracy to defraud does not require an intention
to cause economic loss and approved of the broad propositions of Lord Radcliff
and Lord Denning cited above.
In
the latter case the chief accountant of a bank was charged with conspiring with
the managing director to defraud the bank. He failed to cause to be recorded
in the bank's computerized ledgers the dishonour of cheques so as to avoid a
run on the bank. Lord Goff of Chieveley expressing the opinion of the Board
said at p.277F :
"In
agreement with the approach of Lord Radcliff in Welham ... the cases concerned
with persons performing their public duties are not to be regarded as a special
category in the manner described by Lord Diplock (in Scott) but rather as
exemplifying the general principle that conspiracies to defraud are not
restricted to cases of intention to cause the victim economic loss."
As
Professor Sir John Smith wryly comments "This seems to open a very broad vista
of potential criminal liability" (Smith and Hogan Criminal Law 8th Edition
p.295).
Similarly
in
R
v Moses
[1991] CAR 617 the Court of Appeal held that conspiracy to defraud need not
involve causing economic loss to anyone.
A
recent decision which is critical to the outcome of this appeal is
Adams
v The Queen
[1995] 2 CAR 295 where the Privy Council considered s.257 Crimes Act 1961 in
New Zealand. This provided:
"Conspiracy
to Defraud- Everyone is liable to imprisonment ... who conspires with any other
person by deceit or falsehood or other fraudulent means to defraud the public,
or any person ascertained or unascertained ....".
The
appellant and co-defendants concealed secret profits they had made through
dealings in certain companies, by using an overseas structure of companies and
bank accounts to conceal the information. Their convictions for conspiracy to
defraud were confirmed on the basis that there must exist in the victim some
right or interest capable of being prejudiced, and the entitlement of the
company to make directors accountable for secret profits made at the company's
expense was such an interest. Where a person was charged with conspiracy to
defraud based on economic loss it was necessary for the prosecution to prove
that the victim had a right or interest which was capable of being prejudiced
either by actual loss or by being put at risk. A defendant who dishonestly
concealed from another person information which he was under a duty to disclose
to that person, or which that person was entitled to require him to disclose,
could be guilty of fraud. Since a company was entitled to recover secret
profits made by its directors at its expense, a dishonest agreement by
directors to impede a company in exercising its right of recovery would
constitute a conspiracy to defraud; and that, therefore, since in relation to
all the transactions (except one) the defendant had participated in the use of
the overseas structure dishonestly to conceal the information which he had been
under a duty as a director to disclose to the company he had been properly
convicted. Lord Jauncey, having referred to previous authority, said at p.308:
"Conspiracies
to defraud are not restricted to cases of intention to cause the victim
economic loss. However, where possible economic loss is concerned there can be
no doubt that there must exist some right or interest in the victim which is
capable of being prejudiced whether by actual loss or be put at risk."
and
later:
"The
defendant as a director -- was throughout his tenure -- under a duty, when
entering into a transaction with these companies -- to act with perfect good
faith and to make a full disclosure to the company in question of all material
circumstances --"
and
later at 309f:
"Since
a company is entitled to recover from directors secret profits made by them at
the company's expense, it would follow that any dishonest agreement by
directors to impede a company in the exercise of its right of recovery would
constitute conspiracy to defraud. In their Lordships view a person can be
guilty of fraud when he dishonestly conceals information from another which he
was under a duty to disclose to that other or which that other was entitled to
require him to disclose."
The
remaining relevant characteristics of a conspiracy to defraud can be briefly
stated. This offence requires proof of an agreement which may involve the
commission of more than one offence. It has never been the law that proof of
the conspiracy requires proof of every object or particular given in the
indictment. It is enough that the jury are satisfied as to an agreement that
one or more alleged victims should be defrauded in one or more ways specified.
On
this analysis of the law we turn to the particular circumstances of this case.
In so far it was alleged that there was a conspiracy to defraud PMH the
prosecution case was that there was an agreement extending over several months
and involving various stages, namely the purchase of Exide House, the leasing
of part at a premium, the resale of the property and the extraction of the
premium by means of the invention of the fictitious purchaser and vendor, KC.
There was thus sufficient evidence upon which the jury could safely conclude
that this course of conduct, primarily designed to achieve and conceal a profit
to F through KC resulted in economic loss to PMH.
Moreover,
there was, in our view, strictly speaking, sufficient evidence of a conspiracy
to defraud Minty based on an agreement the object of which, while falling short
of causing economic loss, embraced a right or interest of Minty which was
capable of being prejudiced. During the subsistence of the agreement from
August 1988 to April 1989 the jury could have concluded that the inter-position
of KC and BP concealed that Minty were purchasing from their own Chairman and
that had it not been for the intervention of BP KC would have sold direct to
Minty for £1.8m.
Although
a case might have been made out on this basis the prosecution did not so
present it. They preferred the more straight forward application of Adams and
concentrated on the assertion that F as a director (and Chairman) was
throughout his tenure under a duty, when entering into transactions relating to
the acquisition and disposal of Exide House, to act with perfect faith and to
make full disclosure to the company of all material circumstances, or which
Minty was entitled to require him to disclose. There was evidence that had
Minty's other directors known of F's interest in the purchase which Minty was
funding a class 4 circular to shareholders would have been required. F's
recognition of the dishonest breach of his fiduciary duty to M was demonstrated
by the use of BP as a cover for KC, that B had made a turn of £100k on the
sale to Minty, and moreover, his blatant deceit in failing to tell his Board of
Directors the truth at the critical meeting of 24 February.
Thus
we consider that the prosecution were justified at the close of the evidence in
proceeding on the basis that they could secure a conviction based on a
conspiracy to defraud PMH and Minty. That did not mean that if the jury were
not satisfied of the case regarding one of the companies the whole count
failed. This was apparently the misapprehension in the defence camp at the
start of speeches. Thus the judge was correct in interrupting the first
defence speech and pointing out that the defence were in error in asserting
that the Crown had to prove that both companies were defrauded or that there
was intention to defraud both companies before they could convict.
Seen
in the light of this analysis we conclude that there is no substance in this
ground of appeal. In his summing-up the judge removed all doubt :
"The
allegation by the Crown is that Mr Fussell and Mr Mendonca conspired together
to defraud both PMH and Minty, and Mr Glass for Mr Mendonca conspired together
to defraud both PMH and Minty, and Mr Glass for Mr Mendonca told you on Friday
that that meant the Crown had to prove both companies were defrauded, or there
was an intention to defraud both companies before you could convict. That is
not so, in my view, and I direct you that if you are not sure that both
companies were defrauded, but are sure that one was, so long as you all agree
as to which one, that would be sufficient for a conviction."
This
direction was in accordance with
R
v Brown
[1984] 79 CAR 115, principle 2, that where a number of matters are specified in
a count as together constituting one ingredient in the offence, and any one of
them was capable of doing so, it is enough to establish the ingredient that any
of them was proved; but that any such matter must be proved to the satisfaction
of the whole jury. See also
R
v Handcock and others
"The Times" 11th July 1996 where this Court held that in a case of conspiracy
to defraud the fact that detailed particulars of an offence were listed in the
indictment did not mean that those particulars were an essential ingredient of
the offence and each had to be proved.
Moreover
we consider the illustration of a conspiracy to rob
banks
A and B both apt and helpful.
"Let
me give you a similar example. Suppose there is a charge of conspiracy to rob
bank A and bank B in the same High Street. Suppose you were quite satisfied
there was ample evidence in regard to bank A but, for some reason, not sure
about bank B. It would not be sensible or just in those circumstances for you
to have to be directed to acquit the defendants in regard to bank A, and I do
not do so here in these particular circumstances."
In
our view the Judge was entitled to take the line that he did and to invite the
jury to concentrate on one company only. It was inherently unlikely that the
jury would have convicted on the basis of a conspiracy to defraud Minty alone.
In the light of the Judge's correct direction it was unlikely that some of the
jury convicted on the basis of PMH and others on the basis of Minty. Thus we
reject the contention that the appellants were at risk of being convicted of
three different conspiracies.
Finally
we have to consider whether the defendants were materially prejudiced by the
sequence of events. We must observe that it is unfortunate that the matter
emerged in the course of leading counsel's final address on behalf of F. It
would have been far more satisfactory if this had been raised at the close of
the prosecution case or before speeches began. Such a discussion might well
have alerted the defence to the fact that their line of defence was
misconceived. It is asserted by each leading counsel for the appellants that
if the defence had known that the Judge was likely so to direct he would have
conducted his defence differently. Neither leading counsel indicated how he
would have conducted his defence differently. Neither asserted that he would
have called his client to give evidence. Consequently we consider the element
of prejudice is not of such magnitude that we should be justified in
interfering with the verdict.
Accordingly
we reject this ground of appeal.
Ground
Two
The
second ground on behalf of both defendants asserts that the Judge failed to
give any or any adequate direction on how to approach particulars (i) (ii)
(iii) in the indictment or of the meaning of them. In particular criticism is
made of the paucity of his direction at p.8c:
"What
is alleged here is that Mr Fussell and Mr Mendonca agreed, conspired together,
via a series of steps set out in paragraph one, little three in count one, to
defraud each of the two companies. The essence of the conspiracy alleged is
not that Mr Fussell and Mr Mendonca agreed to make profits from the companies,
but (to) conceal secret profits from them. They have to be concealed, say the
prosecution, because otherwise, in the circumstances, the companies would not
have permitted the profits to be made. The circumstances in question being
that Mr Fussell was a director, indeed a Chairman of each company."
After
the jury retired they sent a note "Require direction. Dishonestly concealing
the intention --".
This
was clearly a reference to (ii)(b) which reads:
"By
dishonestly concealing from PMH the intention that such profit should accrue to
those charged."
For
the avoidance of doubt the jury returned to verify that this referred to the
indictment particulars (ii)(a) and (b) in Count 1 and whether they meant that
the 2 appellants at the start had to intend that there was going to be a profit
(from the lease to PR) or whether it arose incidentally and whether the
intention had to be concealed. After prolonged discussions with the bar the
judge eventually gave the following answer.
"The
answer to your note I direct you is as follows: in regard to little two A and B
alone, does the intention to profit and conceal such profit have to have been
in the minds' of the defendants at the time of the agreement or, if the
opportunity specifically to profit from the granting of the lease to Pacific
Reality came later, is a later intention to profit and conceal sufficient?
Answer: only in the former case is it sufficient. Do you want me to repeat
that, or have you got it?
The
Foreman of the Jury : I have got it. Thank you."
In
other words he was indicating that the intention to profit and conceal the
profit must have been already formed at the time of the agreement. This
direction was concise and certainly not unfavourable to the defendants. It was
clearly grasped by the foreman of the jury.
It
is said that the Judge erred in giving the above direction and the answer
because the elements set out were not in any event sufficient to ground a
conspiracy in these circumstances. As it is put in the skeleton argument of F:
"Even
if the learned Judge was entitled to sum up on the basis of
Adams,
he would have had to make it clear that, were the conspiracy to defraud alleged
possible economic loss, to convict, the jury would have had to be sure that
there was an agreement dishonestly to injure a proprietary right of the
companies, by impeding by concealment the companies from exercising their right
to recover any secret profit made at their expense."
Mr
Winston Roddick QC on behalf of Mendonca in argument indicated a string of
questions which the jury should have been invited to consider.
We
can see no justification for such a convoluted and elaborate direction
contended for by either of the appellants. This was not an unduly complicated
or sophisticated fraud. On the face of F's undisputed conduct as to the
creation of the mythical KC the appellants conspired to make a hidden profit
through the sale of the freehold of Exide House to this mere phantom who
supposedly sold it (by means of the forged Powers of Attorney) to BP who sold
it on to Minty on the same day. The involvement of the fiction could only be
to conceal F's involvement and to deceive F's fellow directors in both
companies. In the absence of a plausible explanation the conduct reeked of
dishonesty.
We
accept Mr David Farrar QC's assertion that the Crown applied to amend the
indictment following the decision in Adams. It is clear to this Court that the
particulars given were drawn with that decision in mind. The jury had a copy
of the indictment and the particulars were meticulously crafted and self
evident from the careful use of language. It was thus not necessary for the
judge to recite the particulars and no further explanation or exposition was
called for.
It
is also said that the summing-up failed to crystallise the issues for the jury
as shown by the questions asked by the jury after retirement. We consider
there are three answers :
1. As
already indicated we brook no criticism of the summing-up itself.
2. The
fact that the jury sent a note is not an indication that the summing-up was
inadequate or muddled or that it had failed to crystallise the issues.
3. After
the note was sent the judge strove mightily to achieve consensus at the bar as
to how the answer should be framed. He then took a pragmatic course by asking
the jury foreman to explain their difficulty at 105E :
"can you help to give me some indication of precisely what it is that is
causing you the difficulty over this particular aspect of the case?"
The
Foreman of the Jury : "It was actually the word, well, "conceal the intention".
Was the intention already there to make the profit, or did the profit come as a
consequence of the transactions that had already taken place?"
Thus
all became clear. There was a further exchange which involved another member
of the jury. There followed another discussion with counsel before the answer
was given.
On
the basis of the analysis of authority and close perusal of events we are
satisfied that the directions of law are unassailable. The judge correctly
identified the principles of law involved He accurately and succinctly
directed the jury without unnecessary elaboration. When a query arose he
discussed the matter with counsel and gave a satisfactory answer. Accordingly
we reject this ground of appeal.
Ground
Three
This
ground alleges that the learned judge failed to direct the jury as to how to
approach the question of lies allegedly told by the appellants. The Crown
asserted both in opening and closing that F had deliberately and repeatedly
lied in his affidavits and interviews with the police. Mr Suckling submits
that this called for a 'Lucas' direction if not in its entirety, then in its
modified form. Although the judge made references to the lies on two occasions
in his summing-up the jury were given no direction as to the approach they
should adopt towards any lies which they found that F had told.
For
M, Mr Roddick makes the same complaint but emphasises that his case was not
exactly similar to the co-accused. In interview M said that the powers of
attorney were sent to him by F already signed. It transpired that F was out of
the country at the date on which the documents purported to have been signed.
He also said that he had seen KC at Heathrow Airport or at least a woman whom
he believed was KC. His belief in her existence went to the whole basis of his
case. If the jury was satisfied that KC did not exist they might easily be
drawn to the conclusion that M's claim to have seen her at the airport was
therefore not true. Thus the need for a Lucas direction arose.
On
behalf of the Crown it was submitted that this was not a case that called for a
Lucas direction in relation to either of the appellants.
In
R v Burge and Pegg [1996] 1 CAR 163 this Court emphasised that a Lucas
direction is not required in every case where the defendant gives evidence,
even if he gives evidence on a number of matter and the jury may conclude in
relation to some matters at least that he has been telling lies. The warning is
only required if there is a danger that they may regard that conclusion as
probative of his guilt of the offence which they are considering. How far a
direction is necessary depends upon the circumstances of the case. The Court
went on to identify four situations where a Lucas direction will usually be
required. The two relevant to this appeal are :
1. Where
the prosecution seeks to show that something said, either in or out of court,
in relation to a separate and distinct issue was a lie and to rely on that lie
as evidence of guilt in relation to the charge which is sought to be proved.
2. Where
although the prosecution have not adopted such an approach the judge reasonably
envisages that there is a real danger that the jury may do so.
In
the case of F the argument that a Lucas direction was called for is stronger as
his case fell within either or both of the above situations. However, it does
not necessarily follow that the omission amounted to a non-direction so as to
undermine the integrity of the verdict. The lies played a small (but not
wholly insignificant) part of the case against him. In a trial which lasted
about 4 weeks involving more than twenty witnesses and many documents the
evidence relating to the two affidavits and the police interview was minimal.
F did not give evidence and therefore there had been no cross-examination on
the contents of his affidavits either by the Crown or his co-defendant. Thus
if the direction had been given it might well have elevated or emphasised the
importance of the lies which they had not merited in the course of the
evidence. In these circumstances the judge still had a discretion whether to
give such a direction. We are not persuaded that he erred in the exercise of
his discretion in not doing so. In reaching this conclusion we bear in mind
the fact that none of the experienced counsel involved thought it appropriate
to point out the omission to the judge at the end of the summing-up even though
they were ready to do so in other respects. We do not harbour suspicion that
if the direction had been given the verdict against F would have been any
different.
In
M's case the lies were of little or no importance. The Crown did not rely upon
the lies as part of its case to any significant extent. There was no reference
to this part of the evidence against him in the summing-up. There was no
reason for the judge to envisage a real danger that the jury might infer guilt
from the lies alone. If M was wrong about seeing a lady who he thought to be
KC it did not necessarily follow that it was a lie, merely a mistake. The case
against him on the conspiracy was strong and on the forgery counts
overwhelming. We are satisfied in his case that a Lucas direction would have
been inappropriate. We have no reason to believe that if the direction had
been given the jury would have acquitted on any of the 3 counts.
Ground
Four
Finally
it is asserted that the learned judge failed to put adequately the appellants
defence to the jury. In particular he failed to remind the jury of the defence
assertions that neither PMH nor Minty had suffered loss and that there was no
intention of defrauding either PMH or Minty.
We
are satisfied that these assertions are based on a misconception of the
prosecution case (as explained earlier) and did not call for such directions by
the judge. Other matters complained of were no more than jury points. Neither
defendant gave evidence or called witnesses. Thus were was nothing of which to
remind the jury.
Even
so the judge said:
"As
far as the defendants are concerned, neither defendant, as you know, has chosen
to give evidence before you; but you will recall -- and I am going to remind
you very briefly of the arguments that have been put forward on their behalf by
Mr Suckling and Mr Glass -- it is said of Mr Fussell that he is a middle-aged
man of good character, not some flash property developer. Why should he want
to defraud two companies of which he was, in effect, the substantial owner
himself; that neither company in reality lost anything; ---."
There
follows two pages of transcript devoted to the arguments on behalf of F,
followed by more than two pages of the arguments advanced by counsel on behalf
of M. There are several other passages in the course of the analysis of the
prosecution case where the defence argument is also spelt out. Accordingly we
are satisfied that it was not incumbent upon the judge the go any further than
he did and that it cannot be said that either of these defendants did not have
a fair crack of the whip.
Accordingly,
we have come to the conclusion that there is no substance in any of the
individual grounds of appeal or collectively and thus there is no basis for us
to conclude that any of the convictions is unsafe. The appeal of each
appellant is dismissed.
Sentence
Leading
counsel for F intimated that he did not wish to pursue the application for
leave to appeal against sentence, and this application is also dismissed.
MR
GRUNWALD: My Lord, may I only say this so far as Mr Fussell is concerned; I
have had a limited opportunity to discuss the contents of the judgment with Mr
Suckling, and he and I are both of the view that we would require some time to
consider whether we will be asking this court to certify a point. I only
mention that so that the court is on notice.
LORD
JUSTICE OTTON: I think you also want us to dismiss the application in respect
of sentence so far as Mr Fussell is concerned.
MR
GRUNWALD: Yes.
LORD
JUSTICE OTTON: Are there any other applications, Miss Gomes?
MISS
GOMES: My Lord, no.
© 1997 Crown Copyright
BAILII:
Copyright Policy |
Disclaimers |
Privacy Policy |
Feedback |
Donate to BAILII
URL: http://www.bailii.org/ew/cases/EWCA/Crim/1997/1764.html